By Sheila WILLIAMS
The Liquidity levels in the universal banks as at December 2018 through to the first quarter of 2019 were among the highest recorded over the past 12 years.
This according to the Governor of the Central Bank of Ghana Dr. Ernest Addison can be attributed to the increase in cash and balances due banks. Similarly, results from the liquidity risk assessment indicate that shocks emanating from a single largest depositor on solvency remains well-contained in the banking industry.
The developments in the banking sector soundness index also revealed an improvement in the general stability and soundness of the banking sector reflecting improved capital buffers, upgrade in assets quality, and enhanced liquidity stance.
This revelation was made when he was speaking at the Official Opening of the New Head Office building of CalBank Limited in Accra, Dr. Addison said the Loan Migration and Contraction Models streets testing also suggests that the banking system was generally resilient to credit risks. Indicating that results from the exchange rate and interest rate risks stress testing revealed that unanticipated shocks may not significantly affect the solvency condition of the entire system.
New development for growth
These positive developments on the banking sector front should improve the efficiency in the industry which should ultimately result in declining interest rates, with increased capitalization of banks, and better credit risk assessment in the banking system, expecting pricing of credit to reflect these trends. Whereas interest rates and spreads that have been slow to adjust should move in line with inflation.
Dr. Ernest Addison used the occasion to congratulate the Board, Management and Staff of CalBank Limited on the opening of their new Head Office building, he encouraged management and staff to continue to maintain high standards of integrity, particularly in the area of its corporate governance to maintain public confidence in CalBank.
